RIP Facebook Stores?

Bloomberg recently reported that Gamestop, JC Penney, Gap,
and Nordstrom have all closed their Facebook stores. Just to be sure I checked Nordstrom’s
Facebook page. It is true, the shopping
tab is gone.

In the summer of 2011, I walked out of Payvment’s Palo Alto
office blown away. They had more than 60,000 merchants on the Facebook Commerce
Platform. But I was still intrigued about the proposition of Facebook Stores. I
wondered shouldn’t the focus first be on engagement rather than sale.

Bloomberg recently reported that Gamestop, JC Penney, Gap,
and Nordstrom have all closed their Facebook stores. Just to be sure I checked Nordstrom’s
Facebook page. It is true, the shopping
tab is gone.

In the summer of 2011, I walked out of Payvment’s Palo Alto
office blown away. They had more than 60,000 merchants on the Facebook Commerce
Platform. But I was still intrigued about the proposition of Facebook Stores. I
wondered shouldn’t the focus first be on engagement rather than sale.

I present three counter-arguments to arguments that favor an
F-Store.

1 – There are a lot of people on Facebook and they discuss many things.
Shopping is one of them and so it makes sense for you to open a store there.

Except that Facebook is more like a community center where
we share little tidbits of our day with people we know, a gossip chamber where
we drop in once a day to sniff something new, a silent sojourn we take to keep
up with the lives of people we didn’t keep in our lives – whatever it is, it is not a place to
shop. Because, we don’t go to Facebook
with an intention to buy something. If we have that intention, we are more
likely to go to the store that sells what we want.

2 – OK, but it is good to have a Facebook store so you are only a tab
away.

If we agree that people who don’t have shopping on their
mind won’t miss not having stores on Facebook, it leaves only two other types
of people, impulse buyers and die-hard fans, to whom a Facebook Store may be
relevant.

Often, when people have an impulse for a product, it is
usually also for a specific kind of product. If they want to eat a chocolate,
they might want to eat a Lindt, if they feel like having a soft drink, it might
be a Diet Pepsi. Since impulse buyers also express their brand affinity, it is
permissible to put them in the same category as die-hard fans.

So then, if I am a die-hard fan, do I really care if my
beloved brand store is just a tab away? In any case, the ‘tab away’ is still a
click away. Why can’t I click on a link from Facebook and land up on their
website?

3 – Fine. But it doesn’t hurt to have a Store tab, does it?

Every business activity has a cost. Besides the cost of the
service itself, there are maintenance and human resource costs. For some
businesses this cost may not be significant and probably pays for the trickle
of business that F-Stores can bring. But there are others who take a strong
view against anything that doesn’t move the needle.

“We just didn’t get
the return on investment we needed from the Facebook market, so we shut it down
pretty quickly,” Ashley Sheetz, Gamestop’s Vice President of Marketing and
Strategy is reported to have said.

In the chain of events from – finding a lead, curating and
converting it into a customer – Facebook stores come into play, if at all, in
the last stage. Facebook’s utility is many times more significant for the
stages that precede the sale event.

It is all about
Engagement

It is true for any business that it should engage the
prospects before they become customers. Traditionally, businesses sought to do
this on their websites. But people are spending more time on social networks
than on any other property.

According to the FireClick Index, the Average User Session
on Fashion & Apparel sites is 3 to 4 minutes. A truism from brick-and-mortar retail is that
the more you browse the more you fill your shopping cart. By that same virtue, a retailer needs to
drive up the engagement metric to get the conversions. And Facebook is the place to do it.

The Complexity of
Engagements

What is worse than a Facebook page without fans? To have one
with many fans. If you are doing nothing for them that is. I heard a story of a
popular consumer brand that targets
young males. They have over 2 million fans and the CMO woefully admitted
that it is quite a challenge to keep all the testosterone on leash.

The whole premise of having a group of people in one place
is to influence them on your brand proposition. Nordstrom runs a campaign
called ‘Sample Saturday’ and gives their Facebook Fans an opportunity to sample
the beauty products. Beautiful.

It however does this on a first-come-first-serve basis. What
if Nordstrom wanted to offer this to only those fans that have a deeper
engagement with the brand. To take the point forward, here is an example of a
hypothetical Coffee chain, Starducks Coffee, and the many things it may want to
do to promote its brand and convert leads into customers.

While Facebook’s standard features and other free widgets
are useful, rich and deep engagements require applications that can manage the
complexity of automating the engagements, and the distribution and tracking of
rewards.

Apps’ the Way

Apps today are designed to do increasingly complex tasks and
getting simpler to use. More good news is that the results are measurable.

Our own application, Trolly, has helped our client 99labels,
a flash sales fashion retailer, achieve up to 8 minutes user engagement on
their Facebook Page. Compared to the Average session duration discussed above,
it is a over 122%. 99labels’ Facebook users saw up to 15 products per session
and engaged with 70% of the products on Trolly. Not just that, 1 in 4 Trolly
Users who engaged with 99labels products on Facebook visited the website with a
strong ‘intent to buy’. You can download the full case-study from our website
trollyapp.com.

Conclusion

On reflection, the reason why many stores may have added an
F-Store in a rush was because it was the easiest part of the Facebook Strategy.
F-stores may yet prove useful but they will certainly tank if the other more
important parts are not addressed.

At Google where I worked before, there was a motto. Focus on
the User and all else will follow. In the case of social marketing, the motto
is, Engage the User and all else will follow.

Kiran Kumar is the CEO and Co-Founder of Adepto
Solutions, a company founded by ex-Googlers. Trolly, a Social Marketing Suite
built by the company will be exhibited at ad:tech in New Delhi on Feb 23-24, 2012. Kiran Kumar tweets at @kkirank